ANZ and UBank, for example have recently changed how to get ‘bonus’ interest on your savings. UBank must deposit $500 per month, now ANZ says must increase BALANCE by $100 per month.;… If you don’t do this, the interest they pay is negligible – almost zero. I searched, but couldn’t find a recent Choice article dealing with this practice (which is now beyond a joke). Maybe an article comparing good savings choices where these games don’t have to be played? This is an important issue for of us lucky enough to have some savings… And the gap between ‘bonus’ and no bonus is unethical. And how many people get ‘caught out’ for not playing the game?
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The Commonwealth Goal Saver accounts require an increase in balance, with NO withdrawals to attract the higher interest rate. We use it as a nest egg and raid it once or twice a year to top up the working account (and forego the higher interest for that month).
Nab has an iSaver account with similar conditions. Have recently opened a higher interest rate Personal Rewards with similar conditions. Both only require $200 each/month.
Problem with doing a comparison, is that it will be a snapshot in time, as banks can change conditions at will.
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Recently I found St George Bank have an Incentive Saver Account and only needs a $50.00 increase each month to be eligible for the Bonus rate.
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Thank you. Yes, I did see this article when it came out – but it didn’t come up with the search I did this morning (not sure why, maybe I used the wrong search terms). And will check out St George. I guess a key question is why is there a HUGE difference between the basic rate & the ‘bonus’ rates? Thank you all for your comments. Or maybe I need to check out Term Deposits (or similar) unless want to continually think every month – ‘what do I gave to do now – has it changed from last month…’ or lose the game and add to the coffers of the Banks.
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Thanks, this is a good tip.
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My view: If they catch customers out even once a year their profitability goes up smartly. That would not be the case if the interest rates for playing/not playing for any given month were more similar.
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I have a direct debit from the working account to the higher interest account, so I don’t need to remember. If I try to do a withdrawal the CBA warns me that the bonus interest won’t be paid, giving me an opportunity to back out, should I be doing it by mistake. None of my bonus interest accounts charge fees. I keep up to date on the various offerings from my bank.
Term deposits lock your money up for a period with penalties for early withdrawal. The terms often say they will give you notice, and if you don’t reply, they will re-invest your money at their terms. I had a friend who sold his house about to put it in a term deposit. Showed him an Industry Superannuation Income Pension (he was retired) with no tax on growth, better performance than the bank’s 4.5% and he could withdraw any time (eg buying a new home).
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Every bonus interest type accounts I have seen have conditions which need to be met to achieve the bonus. Most have minimum monthly deposit requirements, with some having no transactions or balance higher by a nominated amount from one month to the next.
There are other saving options at banks which have interest rates similar to the bonus interest accounts. The reason why the interest rate are low when the account doesn’t meet the account conditions for the account is that the money in the account is higher risk to the bank and as such can’t be used to offset loans they provide. Not meeting conditions means the account in effect is an everyday type account, which is reflected in the interest rate paid.
In other savings accounts such as term deposits, the bank has certainty of the funds being held at the bank. With bonus accounts, the same certainty doesn’t exist and hence conditions imposed.
It is very easy not to be caught out, it is called reading the conditions attached to the account to achieve the bonus interest. Each bonus interest account has clear requirements spelt out to the accountholder.
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A good tactic for customers with ‘game dependent’ accounts is to lodge automated transfers early in each month dated to move funds for ‘the game’ at the end of the month to assure they do not forget or lose track.
It is easy but one needs discipline to keep up. I do it as well as re-allocating deposits to here or there on the 1st of each month to maximise interest for the month.
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I use a MyState Bank Bonus Saver account.
It is fee free, requires a $20 deposit and 5 transactions on the debit card that comes with the transaction account you are required to open per month. There is no restriction on using the money in your account - it is not required to increase each month. I use it as a working account. The bank is also on the OSKO system.
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ING Bonus saver account. Deposit $1000 per month into linked Orange account, make 5 paywave transactions/month, and increase your balance from the previous month. Even 1 cent increase is enough.I use their roundup to nearest dollar to increase balance in Bonus Saver. For example, a $5.60 coffee would add 40 c to Bonus Saver.
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I closed my ANZ Plus account this week because of these changes. Getting harder to find Higher interest accounts without conditions.
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In case of UBank, you can deposit the $500 and then immediately withdraw it. This satisfies the requirement and get you the higher interest rate for the month.
It is by far the simplest, by far, of the type of requirements that all the providers of higher rate transaction accounts put on achieving the higher interest rate.
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I moved all my money to Macquarie Bank as they weren’t playing these games with our accounts.
My savings and regular transaction accounts attract 4.75% interest at present and that’s not bonus interest.
I don’t have to deposit a minimum amount each month and I can withdraw money at any time and still get the full 4.75% on the daily balance remaining in the account.
I’ve ended up closing my CBA account which was hardly paying any interest in my transaction account. My ING saving account couldn’t compete with Macquarie Bank’s accounts.
If your Macquarie Bank account is about to get to $1,000,000 you can open another one and continue to receive the full interest rate. So it’s pretty much impossible to earn less than 4.75% no matter what you do with your money.
Not sure if any other bank can compete with this.
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I was going to post exactly that about Ubank. It was $200, but recently changed to $500.
And that is all that is required to get the bonus interest. Very simple.
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After many happy years with Ubank, the savings account requirements sent me packing. Did a lot of online research and found the NAB Reward Saver the best.
5% interest with no minimum deposit amount
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I’ve been using this trick for years to max out the interest on a CBA “GoalSaver” account, by having an automatic transfer of $100 per pay day from my regular account.
Automatic transfers for my power, phone, etc payments on pay day are also great for budgeting & preventing bill-shock.
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I totally agree that to obtain the interest on your savings you do need to play their game. We closed our Newcastle Permanent Smart Saver account for having too many restrictions and moved our savings to ANZ plus. And now ANZ Plus will also place restrictions on when interest is paid.
It is unfair to lose the interest on your savings for the entire month because the balance had not increased by at least $100. They encourage you to have a goal such as saving for a car or holiday yet when you withdraw part of your savings to purchase one of these they penalise you by not giving you interest on any of your savings not just what’s been withdrawn.
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People get caught out because they need to access their savings for whatever reason and not because they don’t know the conditions. The reason people put money in these accounts is to earn interest but still have access to their money when needed. Otherwise you would just use Term Deposits.
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